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Pier 1 Imports Inc (NYSE:PIR)
Inventory Turnover
0.60 (As of May. 2014)

Inventory turnover measures how fast the company turns over its inventory within a year. It is calculated as cost of goods sold divided by average inventory. Pier 1 Imports Inc's cost of goods sold for the three months ended in May. 2014 was $251 Mil. Pier 1 Imports Inc's average inventory for the quarter that ended in May. 2014 was $418 Mil. Pier 1 Imports Inc's inventory turnover for the quarter that ended in May. 2014 was 0.60.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Pier 1 Imports Inc's days inventory for the three months ended in May. 2014 was 151.21.

Inventory can be measured by Days Sales of Inventory (DSI). Pier 1 Imports Inc's days sales of inventory (DSI) for the three months ended in May. 2014 was 90.69.

Inventory to revenue ratio determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. Pier 1 Imports Inc's inventory to revenue ratio for the quarter that ended in May. 2014 was 1.00.


Definition

Pier 1 Imports Inc's Inventory Turnover for the fiscal year that ended in Feb. 2014 is calculated as

Inventory Turnover (A: Feb. 2014 )=Cost of Goods Sold (A: Feb. 2014 ) / Average Inventory (A: Feb. 2014 )
=1026.18 / 377.65
=2.72

Pier 1 Imports Inc's Inventory Turnover for the quarter that ended in May. 2014 is calculated as

Inventory Turnover (Q: May. 2014 )=Cost of Goods Sold (Q: May. 2014 ) / Average Inventory (Q: May. 2014 )
=251.345 / 417.643
=0.60

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Inventory Turnover measures how fast the company turns over its inventory within a year. A higher inventory turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand.

1. Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Pier 1 Imports Inc's Days Inventory for the three months ended in May. 2014 is calculated as:

Days Inventory=Inventory (Q: May. 2014 )/Cost of Goods Sold (Q: May. 2014 )*Days in Period
=417.643/251.345*91
=151.21

2. Inventory can be measured by Days Sales of Inventory (DSI).

Pier 1 Imports Inc's Days Sales of Inventory for the three months ended in May. 2014 is calculated as:

Days Sales of Inventory (DSI)=Inventory (Q: May. 2014 )/Revenue (Q: May. 2014 )*Days in Period
=417.643/419.059*91
=90.69

3. Inventory to Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

Pier 1 Imports Inc's Inventory to Revenue for the quarter that ended in May. 2014 is calculated as

Inventory to Revenue=Inventory (Q: May. 2014 ) / Revenue (Q: May. 2014 )
=417.643 / 419.059
=1.00

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Be Aware

Usually retailers pile up their inventories at holiday seasons to meet the stronger demand. Therefore, the inventory of a particular quarter of a year should not be used to calculate inventory turnover. An average inventory is a better indication.


Related Terms

Inventory, Cost of Goods Sold, Days Inventory, Revenue, Inventory to Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Pier 1 Imports Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Inventory Turnover 3.073.183.192.603.032.712.702.742.702.72

Pier 1 Imports Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Inventory Turnover 0.810.630.510.570.830.590.530.610.800.60
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